Visteon rallies on $1.5 billion in financing

SAN FRANCISCO (MarketWatch) -- Visteon Corp. shares jumped as much as 7% Tuesday after the auto-parts maker, forging ahead with its three-year restructuring plan, said it received $1.5 billion in secured loans.

But Visteon's
VC, +1.55%
stock reversed course to close down 7 cents at $7.16, backing off from an intraday high of $7.72 amid broader market weakness.

Shares had nearly doubled in the past month, with an upbeat first-quarter report contributing to the steady rally. See full story.

The Van Buren Township, Mich.-based company said the financing, courtesy of J.P. Morgan Chase Bank and Citigroup Global Markets, includes an $800 million seven-year term loan.

The remainder will be divided between two five-year revolving credit facilities for the U.S. and Europe, Visteon said.

"We are following through on our plan to address, by mid-summer of this year, all credit facilities that expire in June 2007," said CFO James Palmer. "This is another important milestone in Visteon's three-year improvement plan."

"This action shows management's ability to execute on its pledge to refinance the package by midyear as well as its ability to secure additional financing over and above the amount needed to pay the loans coming due," he said.

The supplier, struggling with lofty raw material costs and lower production from its top customers, is in the early stages of an $800 million facelift that could affect up to 23 unprofitable and non-core plants worldwide.

CEO Michael Johnston said last week Visteon is looking for opportunities to speed up the restructuring, which was first announced in the fourth quarter of 2005 after Ford
F, +0.42%
agreed to take back plants and fund additional restructuring moves.

At the time, Ford, which spun off Visteon in 2000, may have rescued its former parts division from bankruptcy with the financial lifeline. See full story.

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